Networks, for example telecommunications networks, deliver data, or traffic, from sources to destinations within the network. These networks may be operated by companies that use the networks for their own private communications. They may also be operated by service providers, which make the network available to others to use for communication of their own data.
It is often useful for two or more network operators to allow traffic to travel between their respective networks, to extend the range of communication available to those using the networks. The Internet is the largest such collection of intercommunicating networks. A network operator, A, may pay another network operator, B, to allow traffic sourced from or destined to users of Network A to travel over Network B. This arrangement is referred to as Network A buying transit from Network B. There may also be a reciprocal arrangement between Networks A and B in which, without charge, both allow traffic sourced and destined for users of their respective networks to travel over the other network, without payment. This arrangement is known as peering. A network may engage in multiple transit and peering arrangements with other networks.